Monday, July 1, 2013

For many years now, I have wondered why the hell outfits like Exxon should think of themselves as an oil business. Now, I understand that if you have been getting rich for 150 years trafficking in oil, it maybe a stretch to think of yourselves as being in the generic energy business. After all, it takes enormous investment in real economy skills and tooling to get gasoline to your neighborhood station. On the other hand, while the skill sets for running an offshore oil platform and maintaining a wind farm are quite different, they have much more in common than any overlap between these Producer skill sets and someone trading on currency spreads.

At one time, BP claimed to be interested in alternative energy but their heart was never in it and their investments never matched the expectations of their Beyond Petroleum ad campaign. But at least they brought the subject up!

But over at Daily Kos, someone posted a dairy that claimed the reason the energy companies cling so tightly to their petroleum (and other fossil fuel) assets is because they have been leveraged and so must be exploited or a bunch of investors will be VERY unhappy—investors that include pension funds, etc.

A 2012 poll by the Pew Research Center found that only 42% of Americans believed that the earth is warming due to human activity. While the poll also ascertained that a solid majority (67%) did believe the earth was warming, only 45% believed that there was a general consensus among scientists with regard to the planet warming due to human activity.

This should be surprising, given that somewhere between 97% (source) and 99.8% (source) of peer-reviewed scientific articles over the last 20 years conclude that the planet is warming due to human activities. However, most of us are no longer surprised by this because we have - on too many occasions - found ourselves caught in one of those unwinnable arguments with someone who is thoroughly convinced there is some international conspiracy to trick everyone into thinking our actions have consequences, and who has an unending supply of disinformation to back up their view.

If we are to have any hope of ensuring that this planet is not irreversibly altered by the time our grandchildren are our age, I think we may need to re-evaluate how we go about winning the broader climate argument.

We have a number of options available with regard to how we can go about ensuring that we leave behind a planet that is at least inhabitable. Ideally, carbon emissions would be cut drastically and infrastructure would be put in place to prepare for the levels of warming that are already unavoidable. Unfortunately, it is difficult to imagine any of the necessary movement on the issue being politically feasible anytime in the near future, even though time is very much of the essence.

Why are carbon cuts so unfeasible?

As things currently stand, the likelihood of meaningful cuts to carbon emissions is negligible. Public opinion on whether there is a human contribution to climate change is more of an effect of the root cause of this rather than the cause itself. The primary reason for the lack of feasibility in making a meaningful reduction in carbon emissions is a practice known as "Reserves Based Lending" which provides a massive source of capital for companies and governments that own or control fossil fuel reserves. This common practice means that not only is there a financial incentive for ensuring that carbon emissions continue unabated (in the form of share prices based on existing, available but unburned fossil fuel assets), but there is actually a financial requirement to ensure these reserves can still be utilized (with all the carbon emissions that entails) because to not do so would literally erase trillions of dollars from the world economy. As you can imagine, those who have borrowed with their reserves as collateral simply cannot allow those reserves to be taken off the table, and so aggressively oppose anything that might lead to carbon emission reduction and the possibility that those reserves couldn't be used (thus destroying their value as an asset).

Aside from the less apparent effects of this monetary incentive to maintain the status quo (such as political campaign contributions from these companies in return for stymieing any movement on global warming) the most notable effect is in the American mainstream media. For every article on climate change that references a scientist or scientific paper discussing climate change, it has become mandatory to give equal time to a "climate skeptic" - someone who seldom has any qualification whatsoever in climatology, but who will provide a quote to "balance" the article due to the allegedly "disputed" nature of climate science. This "balance" has absolutely nothing to do with journalistic integrity nor an attempt to ensure there is no bias in reporting - in fact, on many issues about which there is far less certainty no effort is made at all to balance an opinion. For example, it has become widely accepted that Iran is pursuing nuclear weapons (even though there is no current evidence to support that conclusion) because for years the assertion has been made without providing any opposing argument in articles on the subject, the reason being that there's no incentive to do so. On the subject of climate change however - a subject with an exponentially higher level of certainty - news outlets run the risk of incurring the wrath of those with multi-trillion-dollar vested interests in the matter, so the result is that the media overall are left with little choice but to "balance" facts with skeptic sound bites.

With this, those with a vested interest in ensuring carbon emissions are not meaningfully reduced demonstrate their power and influence - with so much money at stake, no significant movement appears possible. more